Investor's window  |  September 18, 2012 08:55:21

Collapse of the U.S. fiscal cliff?

In recent months, investors along with the media around the world focused only on the events surrounding the eurozone debt crisis. Forgetting the same time but do not even happening on the other side of the Atlantic, in the USA. By the end of this year because U.S. policymakers must agree, if passed through automatic budget cuts along with tax increases or re-raises debt ceiling possible.

Let us but look at this problem in order. U.S. public debt climbed to an unprecedented 16 trillion USD, which is the level of full-year GDP of the country and it also means that each of the U.S. population owes 51 thousand. USD.   Most of this debt is in the hands of domestic institutions (68%) and only the remaining 32% held by foreign entities. Most while talking about China as a significant creditor USA. However, this is a very common mistake especially amplified by the media. Although China is the largest foreign holder of U.S. bonds, however this her share is only 7.5% of the total debt of the United States.And because most of the debt is held by domestic entities, the U.S. was able to maintain the highest possible rating by most major credit rating agencies.

And as with the related fiscal cliff? The absolute amount of the public debt in the U.S. Congress and capping above the level of the debt ceiling would not get. If the debt still exceeded this level will automatically run the tool on the chamfer (freezing spending combined with tax increases). For its U.S. debt ceiling gets this year and it is this situation is referred to as a fiscal cliff.

The idea zastropováním debt is not new. USA this practice run since 1917, but always, but when debt approached or exceeded this threshold, the ceiling was raised by Congress. Since 1962 this has happened 74x and since 2001 has 10x. the last time the U.S. went ahead of 2011, when debt climbed to 14.3 trillion. Now the debt by nearly $ 2 trillion higher, and again, it seems that the ceiling is shifted to a higher level and the problem again pushed for time. Obstacle to solving debt the U.S. is strong disagreement between Republicans and Democrats, who are still deepened the ongoing presidential campaign.

There is also in the interest of either of the political parties fall from the fiscal cliff. It is assumed that automatic startup mechanisms would result in a reduction in debt of 560 billion USD, on the one hand, but also reduce GDP by 4 percentage points in 2013, a fall into recession associated with an increase in unemployment by 1 percentage point. Thus black scenario is at a time when the U.S. is still fragile economic recovery inadmissible, but neither delaying the problem is not favorable. Either way, investors should focus more on what is happening in the USA and count on the fact that only very close to the decision of Congress to override the ceiling during winter can cause strong nervousness in financial markets.

George Šimara

Marek Hatlapatka (1978)

He graduated from the Economics Faculty of the Technical University of Ostrava, completed a 3-month internship in London and Intensive fundamental analysis under the leadership of former chief analyst of Erste Bank Galea Kirking. In a society CYRRUS, as is employed since 2006, when he took the place of the analyst equity markets with a focus on foreign markets, pharmaceutical and banking sectors. Subsequently he specialized in banking, electricity and coal mining in these sectors is now one of the most sought after professionals in the Czech Republic.In 2008 he became head of the analytical department of the company CYRRUS, as in this position works even today. Long been one of the most cited Czech economists, in 2010 became the fourth most cited economist in the Czech media.

CYRRUS Company, Inc., is a licensed securities dealer. The company was founded in 1995 and is currently the largest non Prague brokerage companies. It is a member of the Stock Exchange Prague Stock Exchangein Warsaw. CYRRUS Company, Inc., provides comprehensive services in the capital markets, private and corporate clients, focusing on the Exchange trading system SPAD Prague Stock Exchange and trading on foreign markets in Poland, Hungary, Turkey, Germany and the USA. The company is one of the most important Czech businessmen with investment certificates.

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Zřítí se USA z fiskálního útesu? (2)

Diskuze a názory
18.09. 21:42  P.S. (Ullsperger)
18.09. 21:30  Jako vždy (Ullsperger)

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